A Short Overview of the US Fast Food Restaurant Industry

The US economy is a consumption-based economy. Accordingly many of the industries that drive consumption such as retail, hospitality, services, education, healthcare, fast food, etc. are huge. Among these one of the largest in terms of sales, employment and other factors is the fast food industry. Fast food restaurants are also known as Quick Service Restaurants (QSRs) in industry language. Unlike any other country, QSRs are ubiquitous throughout the country – from highways exits to small towns to malls and everything in between it is almost impossible to avoid noticing them.

According to data by Statista, the industry grew from about $230.0 billion in 2012 to over $331.0 in 2022. In 2020, the industry had a dip in market size due to the Covid-19 pandemic. Except that year the growth has been consistent year after year. This year the market size has shot up to record levels not because thousands of new outlets were opened or the population jumped but because these chains increased their menu prices.

With that said, among the fast food chains the biggest is McDonald’s(MCD) in terms of total revenue. McD pulled in $46B in sales in 2021. The second ranked chain in Starbucks(SBUX) with revenue of $24B. The industry is big enough that plenty of others also generate billions in revenue as shown in the chart below. For instance, relatively small Five Guys made nearly $1.4B last year.

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Source: ‘I’m lovin it’ – 4 new charts on Quick Service Restaurants by Truman, Genuine Impact Newsletter, Substack

Though McD has the highest revenue Starbucks has the most number of stores as shown in the following graphic:

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Source: ‘I’m lovin it’ – 4 new charts on Quick Service Restaurants by Truman, Genuine Impact Newsletter, Substack

Below is another take on QSRs from Visual Capitalist for 2021 data categorized by food type:

Source: Ranked: The Most Popular Fast Food Brands in America, Visual Capitalist

Many years ago a famous book was titled “Fast Food Nation”. It is indeed true that the country is still the fast food nation and the industry shows no signs of slowing down. The graphic below shows all the major fast food chains’ logos:

Source: Rockwell FCS

From an investment point of view, about 50 of these firms trade on the NYSE and NASDAQ. While the S&P 500 is in a bear market, McDonald’s(MCD) is up by 2.4% year-to-date and closed at $275 on Friday. When the market takes a deep dive investors can scoop up some of the names selectively.

Disclosure: No positions

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